Take the gas and run. In the last two years Eni SpA would have earned 550 million dollars by canceling and then reselling the liquefied natural gas promised to Pakistan, thus aggravating the Asian country’s energy shortage. The Italian energy major would not have respected a series of shipments scheduled between the end of 2021 and the beginning of 2023, as required by a contract for the supply of one load of LNG per month stipulated in 2017. However, to divert it elsewhere, taking advantage of the ‘rise in energy prices on the markets, so as to achieve the maximum profit from each load.
This is what a survey carried out by the non-profit investigative organization claims Sourcematerial and by the Italian environmental group Recommon. In their joint report, the associations argue that during that period, the Six-legged Dog’s LNG ships avoided Pakistan and headed for Türkiye: of the 12 shipments scheduled until February 2023, at least four would have missed. Eni denied it took advantage of the situation, saying any undelivered cargoes in Pakistan were “beyond its reasonable control”. The company said: “Only where no mutually acceptable commercial solutions were available, the contractual provisions for non-delivery were applied.”
However, the cancellations came at a time when global gas markets were tightening, prices were all place and the Russian invasion of Ukraine had triggered a rush on LNG that left shortages for buyers who could no longer afford the fuel. Pakistan’s contracts, linked to oil tariffs, were at a fraction of spot LNG prices during the peak of last year’s energy crisis and included a CRIMINAL relatively modest 30% for cancellation, making it profitable for suppliers to legally stop shipments.
And where did they end up? ReCommon and Source Material tracked relevant terminals, export trade databases and gas tanker routes. From the information gathered, it emerges that, during 2021, Eni supplied Pakistan through the tterminal of Damietta, in Egypt, managed by the same six-legged dog. In autumn, however, when gas prices reach unprecedented heights, flows to Pakistan abruptly stop and the long series of cancellations by the Italian company begins.
At the same time, you register a increase remarkable gods volumes of Egyptian LNG sold on the markets, especially towards Turkey, which emerges as the main recipient of cargoes from the Damietta terminal. It is known that, in those months, the Turkish company Botas had purchased LNG on the market at an exorbitant price, more than three times the Pakistani one. From the fall of 2021 to the present, Botas has reportedly received well 15 loads of Egyptian gas by ENI, all coming from the Damietta terminal. In the same period of time, the Italian company will notify Pakistan of the cancellation of 8 of the scheduled deliveries. And he will make only one delivery.
“Fossil fuel companies like Eni want us to believe they are contributing to energy security,” he said Alessandro Runci, activist of Recommon. “This investigation shows how their only goal is to secure their profits at any cost.” It should also be said that Eni was not the only company to cancel shipments to Pakistan. But there is equally no doubt that the surge in prices has led to record profits for LNG producers, including Eni, which has earned 2.1 billion euros ($2.3 billion) before interest and taxes in 2021-2022.
In any case, the investigation points out, the consequences have been severe for Pakistan, which has faced widespread blackouts as the state-owned importer has been unable to find alternative supplies. Furthermore, the decline in LNG deliveries to Pakistan would then result in an increase in the country’s dependence on coal, with a related increase in emissions.